NTU EMBA 93 商學組 Group 1 葉憲昌 陳慧銘 黃秀錦 黃世傑 蔡森豪 李衡礎 Report of Paper Review on Putting the Enterprise into the Enterprise System NTU EMBA 93 商學組 Group 1 葉憲昌 陳慧銘 黃秀錦 黃世傑 蔡森豪 李衡礎

Content What ERP is ERP vs Business Strategy ERP vs Organization - Apple vs Compaq ERP vs Organization Federalist model of ERP - Monsanto vs HP Example of Elf Atochem

What ERP Is Scope of ERP system - Financial and accounting information - Human resource information - Supply chain information - Customer information - Operations and logistics - Sales and marketing

What ERP is Managers and stakeholders Reporting applications Central Financial applications Sales and delivery applications Central Database Manufacturing applications Sales force and customer service reps Back-office administrator and workers Customers Suppliers Service Applications Inventory and supply applications Human resource management application Employee

ERP vs Business Strategy Focus is on “ enterprise “ instead of on “ system “ - Enterprise : Organization and strategy - System : Technical criteria alone Does ERP vendor or customers structure the system to reflect the best practices ? Is ERP designated processes undermining company competitive edge corresponding to business strategy ?

ERP vs Business Strategy ERP is risk to dissolve the source of advantage of differentiation - Apple : using designated process - Compaq : customized process for build-to-order business model

ERP vs Organization Direct and often paradoxical impact on a company organization and culture - streamline the management structure with universal, real-time access to operating and financial data > more flatter, flexible and democratic - Centralization of control over information and standardization of processes > Hierarchical, command-and-control organization with uniform culture

ERP vs Organization Difference in regional market remaining so profound that strict process uniformity being counterproductive

Federalist Model To preserve local autonomy while maintaining a degree of cooperate control Not a single and global version of ERP but different version of the system in different regional organization to tailor to support local operating practices - A core of common information like financial shared by all the organizations - Other information like customers collected, stored and controlled locally

Federalist Model Challenge to manager : what should be common throughout the company and what should be allow to vary Corporate and business-unit managers working together to think through each major type information and each major process in the company - How important to process order consistently worldwide - Does the term “ customer “ mean identically in every BU

Federalist Model Example - Monsanto > High priority on achieving the greatest possible degree of commonality with standardized 85% of data in ERP > Standardized all data about material but customers and factory data > reduce 24 coding schemes for suppliers to one - HP > A company with strong tradition of BU autonomy > Only a small amount financial data for commonality

Example of Elf Atochem US$2B regional chemical subsidiary under Elf France 12 business units Situations - ordering systems not integrated with production system - sales forecast not tied to budgeting system - Financial data independently - US$6M inventory written off annually - Top management not getting the right information timely

Example of Elf Atochem Top management’s attitude - Recognize ERP the best approach to integrate data flow - View ERP project as an opportunity to reflect strategy and organization instead of just a technology initiative - Company’s difficulties being fragmentation of its organization not the fragmentation of the system > Focus on material management, production planning, order management, financial report and customer relationship > Each process was re-designed to take full advantage of new ERP capability, particularly the ability to simplify the flow of information > Eliminate layer of information middleman - Set the goal of offering the best customer service

Example of Elf Atochem Implementation - Install ERP modules only required to support target processes - Make fundamental change of organizational structure > AR & credit departments combined > Customer-service departments combined > Establish position of Demand Manager to integrate sales & production processes - 60-person core implementation team reporting to executive committee

Example of Elf Atochem Implementation - 60-person core implementation team reporting to executive committee > Business analysts and information technologists - A set of super users from Bus and corporate helping to ensure decision of ERP system’s configuration being made with the broadest possible understanding on business and training people of its department - Installation one BU at a time to ensure the effort is manageable and to refine the ERP system and the process

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